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Gold Tumbles on RSI Signal, but That Second Step Could Do Some Damage

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Critical targets, levels, and supports for major liquid commodities.

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The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: Gold plunged Tuesday in reaction to Monday's RSI negative divergence. Look out below - really far below - if that is confirmed by a second consecutive lower close Wednesday.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Tuesday's gap up to Friday's 2.65 high had only ranged sideways intraday. Tuesday morning's probe above it to 82.86 was retraced into negative territory at 82.50, under all of Monday's range. There is still no sell signal, and the rally can extend up this way indefinitely, but it is only day-to-day and not reliable.

Eurodollar
Sep Contract EC; (FXE)
Monday's gap down to 1.2500 was not any more bearish since the balance of the session only ranged around it. So, Tuesday's gap down eventually extended to 1.2450 but recovered back up to 1.2500. There is still no buy signal, and the drop can extend down this way indefinitely, but it is only day-to-day and not reliable.

Gold
Aug Contract GC; (GLD)
RSIs diverged negatively while Monday's rally above 1572.50 to probe 1584.00 up to 1589.00. Tuesday's open gapped down and slid to 1568.00. The close was still testing 1572.50. A second consecutive lower close would confirm a retest of last week's 1560.00 lows underway.

Silver
Jul Contract SI; (SLV)
Monday's surge to 27.30-27.50 resistance was retraced to 26.75 Tuesday. The recovery attempt's 27.10 pullback limit did not hold. Its immediate recovery Wednesday would be credible for at least filling the gap back up to Monday's 27.50 close, and then potentially extending higher to 30.00-30.35.

30-Year Treasury
Sep Contract US; (TLT)
Tuesday's narrowly ranging session was almost an inside day. But it offered no new information, only validating the pessimism up to 149-18 resistance.

Crude Oil
AUG Contract CL; (USO)
Tuesday's narrow inside day did not rally with the stock market, suggesting that at least one more lower close does still remain in play.

Natural Gas
Jul Contract NG; (UNG), (UNL)
Monday's breakout extended higher Tuesday to 2.77, nearing its 2.83 target, which now remains in-play so long as 2.65 were to hold any test as support.


Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
No positions in stocks mentioned.
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